Ingram Micro 2007 Annual Report Download - page 32

There are two other performance-vesting restricted stock programs that are currently in mid-cycle. The 2006
Executive Long-Term Performance Share Program (the “2006 EIP Program,” which has a 2006-2008 performance
measurement period) and the 2008 Executive Long-Term Performance Share Program (the “2008 EIP Program,”
which has a 2008-2010 performance measurement period). Both of these programs use the same performance
metrics of EPS growth rate and average ROIC as the 2005 Cash LTIP and the 2007 Executive Long-Term
Performance Share Program (the “2007 EIP Program,” which has a 2007-2009 performance measurement period).
The earned awards, if any, under the 2006 EIP Program will be reported in next year’s proxy statement.
The results of the 2004 Cash LTIP (2004-2006 performance measurement period) have not been determined by
the Committee as of March 31, 2008. Although the performance measurement period has ended, the performance
metrics of EPS growth rate and average ROIC were set relative to a group of five peer companies. The information
necessary to finalize these calculations has been delayed due to late reporting by one of the peer companies and was
not available at the time the time this proxy was published. Upon the release of this company’s restated financial
results, the Committee will make a determination regarding the payouts earned under this program, if any.
2007 Long-Term Incentive Awards. In late 2006, the Committee finalized revisions to our process and
procedures for granting equity awards to our executive officers:
• All grants of equity (stock options/stock appreciation rights, performance shares, and restricted stock units)
are to be granted annually on the first trading day of January.
• With the approval of the Committee, grants of equity may also be awarded to executive officers at other
times during the year upon their initial employment with the Company or promotion to more responsible
positions (higher salary grade) within the organization. In such cases, the effective date of the grant will be
the first trading day of the month that follows the effective date of employment or promotion and the
Committee’s approval.
• The methodology for determining the number of full-value awards (time and performance-vesting restricted
stock units) is as follows: The Committee determines the annual target award value for each NEO as a
percentage of their respective salary range mid-point. We then use the 20-day average closing price of the
Company’s stock through December 15 of each year to determine a “stock value”. This “stock value” is then
divided into the target award value to determine the number of full-value shares to grant on grant date, for
annual grants, on the first trading day of January, or for mid-year grants (new hires or promotions), on the
first trading day of the month following the hire or promotion date.
• The methodology for granting stock options uses the same 20-day average closing price of the Company’s
stock that is used for full-value shares to establish a “stock value.” This “stock value” is then used by Hewitt
to calculate a Black-Scholes value per option, which is then divided into the targeted award value to
determine the number of options to grant. For mid-year grants (new hires or promotions), the “stock value”
for option grants is determined using the 20-day average closing price of the Company’s stock through the
15th of the month preceding the effective date of employment or promotion. All options have an exercise
price per share equal to the fair market value of our common stock on the date of grant of such options.
• Effective for share awards granted on or after January 1, 2007, the Committee approved certain changes to
the definition of retirement and the treatment of equity awards upon retirement from the Company under the
2003 Plan:
• The definition of retirement was changed from age 50 or greater with 5 or more years of service with the
Company to age 65 or greater with 5 or more years of service. Early retirement was defined as age 55 or
greater with 10 or more years of service with the Company. Executive officers residing in the European
Union are excluded from the age-based retirement provisions due to certain age-based nondiscrimination
regulations.
• Executive officers who retire from the Company and qualify for retirement treatment as defined above
have a period of 5 years from their retirement date to exercise any vested stock options unless such options
expire earlier.
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